In what seems like a script from a movie, entrepreneur Ashneer Grover’s fortunes seem to be unravelling even as he achieves viral fame thanks to his appearances on the hit show, Shark Tank India.

On one hand, Grover’s dialogues from Shark Tank India are inspiring internet memes galore, but on the other, the co-founder and managing director of Bharat Pe finds himself and his wife, Madhuri Jain Grover, deeply entangled in allegations of fraudulent transactions. Madhuri had the designation of Group Head - Controls at BharatPe.

Since February 4, screenshots of a report, ostensibly by international consulting and risk advisory firm Alvarez & Marsal, have surfaced on social media. Alvarez & Marsal were appointed by BharatPe to conduct an independent audit of Bharat Pe’s internal processes and systems. The screenshots indicate Grover and Madhuri committed financial fraud.

Leaked report

The screenshots reveal that in October 2021, the Directorate General of GST Intelligence conducted a search operation at the BharatPe’s head office and found close to Rs 51 crore was paid to 30 non-existent vendors. The DGGI issued a summons to a BharatPe official on November 1, 2021 on this matter, to which the company responded with a request to waive the show cause notice issued by the DGGI in lieu of paying the dues and necessary penalties. This letter to DGGI was signed by Deepak Jagdishram Gupta. The Alvarez & Marsal report says Gupta is Madhuri’s brother-in-law.

The company went on to reverse input credits of Rs 9.54 crore and additionally paid a penalty of Rs 1.54 crore, according to the screenshots. The total loss to the company for dealing with non-existent vendors was Rs 10.97 crore. BharatPe did not contest the demand for service tax.

Among the questions raised in Alvarez & Marsal’s report is why BharatPe settled this matter, causing a loss of Rs. 10.97 crore, without legal representation.

The report also found that BharatPe was paying consultants for having recruited certain employees. In five cases, the employees joined the company on the date mentioned in the vendor invoice, but said they had no knowledge of being recruited through consultants. The vendor invoices originated from Shwetank Jain, Madhuri’s brother and Grover’s brother-in-law.

Alvarez & Marsal’s review of books of accounts also found spends of Rs. 3.77 crore on vendors with a connection to Panipat, which is Madhuri’s home town.

On February 4, BharatPe issued a statement saying it was yet to receive a final report from Alvarez & Marsal. “We are deeply pained that the integrity of the BharatPe board or individual board members is being questioned time and again through misrepresentation facts and baseless allegations. The board in all its actions has followed due process in the best interest of the company. We would urge that the confidentiality and integrity of the governance review and board meetings is maintained by all. We request everyone, including the media, to show restraint and allow the governance review to take place in a thorough manner,” said BharatPe in its statement.

Who will control BharatPe?

So far, Grover, who is managing director of BharatPe and has been forced to go on leave since January, has denied the allegations against him. Speaking to Moneycontrol, he described the allegations of irregularities in BharatPe and his family’s involvement in them “absolutely false”. He further said that he was being arm-twisted to accept a low rate for his shares and exit the company. He told Moneycontrol that he wanted a pay-out of Rs 4,000 crore for his 9.5 percent stake.

On January 30, Mint had reported that the BharatPe board had decided to terminate Grover’s association with the company.

In the interview with Moneycontrol, Grover dismissed the chief executive officer of BharatPe Suhail Sameer as “a puppet in the hands of investors”. While Grover has sought Sameer’s dismissal from BharatPe’s board, co-founder Shashvat Mansukhbhai Nakrani has said he fully supports Sameer remaining on the board.

Sameer was appointed CEO in August last year. He was put in charge of operations in January this year after Grover went on voluntary leave following a leaked audio clip of an alleged conversation between Grover and an employee of Kotak Mahindra Bank. In the clip, a man identified as Grover is heard verbally abusing and threatening a Kotak employee. It was posted on Twitter by @BabuBongo (an anonymous handle) on January 5.

At the time, Grover responded with a tweet saying the audio clip was fake. He has since deleted that tweet.

On January 10, the Kotak group issued a statement responding to reports that Grover had sent banker Uday Kotak and members of Kotak’s senior leadership a legal notice in October 2021, for allegedly failing to provide him financing during Nykaa’s initial public offering which led to financial losses for Grover. “The notice was received by us and was replied to appropriately at the time, including placing on record our objections to inappropriate language used by Mr. Grover. Appropriate legal action is being pursued. We would like to confirm that there is no breach or violation by the Kotak Group in any manner whatsoever,” Kotak said in its statement.

Days later, BharatPe announced Grover would be on voluntary leave from January 19 till the end of March.

The BharatPe story

Fintech company BharatPe was founded in 2018 by Grover and Nakrani. It offers a range of fintech products that cater to small merchants. In August 2021, BharatPe became a unicorn when it secured funding of $370 million led by Tiger Global at a valuation of $2.85 billion. Among BharatPe’s existing investors are Ribbit Capital and Sequoia Capital India.

The company had also secured an in-principal small finance bank licence, through a joint venture with Mumbai-based Centrum Financial Services, to take over the cooperative lender Punjab and Maharashtra Cooperative Bank and relaunch a small finance bank.

Further in an interview with Mint, Grover said that the company is looking to double its merchant base to 14 million by March 2023 while also planning a public listing by 2024.